Invest money

• Choose company that have great CEO. The company depends on the leadership of the CEO. He must serve as a
  motivator for his employees and strategist for the company. You can see the capability of the CEO from his track record. Does he can bring the company better previously? Look at their degrees and job experience. Where have they worked and for how long? Would you hire that individual to run your company? If the company have known politician to sit on its board, he will help the company with his experience on working in the government. Retired military officials are also very beneficial to companies if he is in the board.
• Companies that have over seas production can take advantage of lower cost. Lower cost can bring higher sales to more customers and a higher profit margin on each unit.
• Companies that operates over seas can enter in untapped market, this will usually bring more sales.
• Company must have competitive advantage from other company. If a company is selling the same product and service, then they are the same as other company. How can they beat other company if they don’t have any advantage from other company.
• Find companies which is expanding. One criteria of this is the company is hiring new employees.You can try speaking to the human resources human manager ask her if she is hiring. If the human resources manager tells you that they are hiring employees it is very important to find out for what positions. The position they are looking can tell you where the company is heading. You can ask him by telling that you are a prospect investor for the company and would like to know more about the company.
• Survey the company’s supplier. Ask them what they think about the company. Do they like doing business with them? Do they pay on time?
• Survey the company’s customer. Ask them what they think about the company. Do they like buying from the company?
• The company have reasonable debt. To measure the safety of a company, we use the debt to equity ratio (D/E). It is a financial ratio indicating the relative proportion of equity and debt used to finance a company’s assets. This ratio is also known as Risk or Gearing. It is equal to total debt divided by shareholders’ equity. The two components of debt and equity are often taken from the firm’s balance sheet, but the ratio may also be calculated using market values for both, if the company’s debt and equity are publicly traded, or using a combination of book value for debt and market value for equity.
  A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as the result of interest expense. If a lot of debt is used to finance increased operations, the company could potentially generate more earnings. If this earnings is greater than the debt cost (interest), then the shareholders will benefit. However, if the cost of this debt outweigh the return that the company generates on the debt through investment and business activities, the company can go bankrupt.
  The debt/equity ratio depends on the industry in which the company operates. For example, capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2, while personal computer companies have a debt/equity of under 0.5.

By Ian Sani.

Do you know your credit score? Do you know how important it is? Some people don’t realize how important it is. Your credit score may be called with many terms, like credit rating, FICO rating, or a credit risk score.

Credit score is very important because it will let lenders to get an idea of how likely you are to repay your bills. Every time you apply for credit, apply for a job that requires you to handle money, your credit score is checked. Your credit score can be checked by anyone with a legitimate business so they know whether they can trust you financially or not.

The credit score is a number, usually between 300 and 850, that lets lenders know how well you are paying off your debts and how much of a credit risk you are. The higher your credit score, the better credit risk you make and the more likely you are to be given credit. Scores below 600 will often give you trouble in finding credit, while scores of 720 and above will generally give you the best interest rates. But it all depends on the lender, how strict they are. Some lenders will also look at your entire credit report and other can accept or reject your loan application based solely on your credit score.
The credit score is based on your credit report, which contains a history of your past debts and repayments. Credit bureaus use computers and mathematical calculations to arrive at a credit score from the information contained in your credit report.

Each credit bureau uses different methods to do calculate credit score but most credit bureaus use the FICO system. FICO is an acronym for the credit score calculating software offered by Fair Isaac Corporation company. Because it is widely used, credit scores are sometimes called FICO scores or FICO ratings, although it is important to understand that your score may be calculated using different software.

To help people or company access credit score there are credit bureaus which creates credit reports. They will provide their information to companies as credit card companies and utility companies.
Once a file is begun on you when you open a bank account or have bills to pay, the information of your payment is recorded at credit bureaus. They will use all those information to calculate your credit score. Those information are:

1. Your credit history (accounts for more than a third of your credit score in some cases). Late payment, loan defaults, unpaid taxes, bankruptcies will lower your score.
2. Your current debts (accounts for approximately a third of your credit score in some cases). If you have lots of current debt, it may indicate that you will have trouble paying back debts in the future.
3. How long you have had credit (accounts for up to 15% of your credit score in some cases). If you have not had credit accounts for a long time, lenders won’t know whether you make a good credit risk or not.
4. The types of credit you have (accounts for about one tenth of your credit score, in most cases). Lenders like to see a mix of financial responsibilities that you handle well.